Chapter 13: Control processes and systems Business Leadership: Management Fundamentals John R. Schermerhorn, Jr., Barry Wright, and Lorie Guest © John Wiley & Sons Canada, Ltd.

Why and How Managers Assert Control Controlling: The process of measuring performance and taking action to ensure desired results Has a positive and necessary role in the management process Ensures that the right things happen, in the right way, at the right time Organizational learning and after-action review © John Wiley & Sons Canada Ltd.

Figure 13.1 The role of controlling in the management process © John Wiley & Sons Canada Ltd.

Types of Controls Feedforward controls: Employed before a work activity begins Ensures that: Objectives are clear Proper directions are established Right resources are available Focuses on quality of resources Example: Feedforward controls at McDonalds. Ensure suppliers provide product meeting strict specifications, e.g., bun texture, uniformity of colour, etc. © John Wiley & Sons Canada Ltd.

Types of Controls (cont’d) Concurrent controls: Focus on what happens during work process Monitor ongoing operations to make sure they are being done according to plan Can reduce waste in unacceptable finished products or services Example: Concurrent controls at McDonalds Supervisors trained to take action when something is done right or when problem occurs © John Wiley & Sons Canada Ltd.

Types of Controls (cont’d) Feedback controls: Take place after work is completed Focus on quality of end results Provide useful information for improving future operations http://www.youtube.com/watch?v=_V1OfpYdnaY Example: Feedback at McDonalds Provide a survey to customers to complete regarding their experience © John Wiley & Sons Canada Ltd.

Which type of control will you use? How will you measure control? © John Wiley & Sons Canada Ltd.

Figure 13.2 The role of feedforward, concurrent, and feedback controls in organizations © John Wiley & Sons Canada Ltd.

Internal and External Controls Internal control: allows motivated individuals and groups to exercise self-discipline in fulfilling job expectations External control: occurs through personal supervision and the use of formal administrative systems Bureaucratic control: influences behaviour through authority, policies, procedures, job descriptions, budgets, and day-to-day supervision Clan control: influences behaviour through norms and expectations set by the organizational culture Market control: influences behaviour through market competition © John Wiley & Sons Canada Ltd.

Steps in the Control Process Step 1: establish objectives and standards Step 2: measure actual performance Step 3: compare results with objectives and standards Step 4: take corrective action as needed © John Wiley & Sons Canada Ltd.

Figure 13.4 Four steps in the control process © John Wiley & Sons Canada Ltd.

Steps in the Control Process (cont’d) Step 1: Establishing objectives and standards Output standards: Measure performance results in terms of quantity, quality, cost, or time Input standards: Measure effort in terms of amount of work expended in task performance © John Wiley & Sons Canada Ltd.

Steps in the Control Process (cont’d) Step 2: Measuring actual performance Goal is accurate measurement of actual performance results and/or performance efforts Must identify significant differences between actual results and original plan Effective control requires measurement © John Wiley & Sons Canada Ltd.

Steps in the Control Process (cont’d) Step 3: Comparing results with objectives and standards Need for action reflects the difference between desired performance and actual performance Comparison methods: Historical comparison Relative comparison Engineering comparison http://www.youtube.com/watch?v=j2Lnu0SUs00 © John Wiley & Sons Canada Ltd.

Steps in the Control Process (cont’d) Step 4: Taking corrective action Taking action when a discrepancy exists between desired and actual performance Management by exception: Giving attention to situations showing the greatest need for action Types of exceptions: Problem situation Opportunity situation © John Wiley & Sons Canada Ltd.

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